COMPETITION WATCHDOG CALLED INTO PHARMA FEUD.
Practice could keep costs high for consumers
The ongoing feud between brand-name pharmaceutical companies and their generic rivals has taken an unusual turn, with Canada’s competition watchdog alleging some brand firms are trying to stymie generic companies by blocking access to their medicines.
Health Canada requires generic-drug producers to conduct tests proving their cheaper copies act similarly in people as the original drug, meaning they need samples of the brand-name product.
But pharmaceutical companies have “increasingly” been denying or delaying sales of their medicines to the generic manufacturers, the Competition Bureau of Canada charges in court documents obtained by the National Post.
That in turn could postpone “the launch of generic drugs and prevent competition for some time,” says an affidavit the bureau filed in the Federal Court of Canada.
“Such practices can deprive consumers and the economy of the benefits of competition, including lower drug costs,” says the document, part of an ongoing probe quietly begun in 2016
The bureau is investigating the industry under sections of the Competition Act dealing with restrictive trade practices, which allow it to order corrective action and levy fines of up to $15 million.
Jayme Albert, a spokesman for the agency, said last week the bureau has yet to finish the inquiry or decide whether to take enforcement action.
“There is no conclusion of wrongdoing at this time,” he said.
In the U.S., however, the Trump administration has already acted against what it calls “gaming” of the system to curtail generic competition, announcing in May that it would post details of such incidents on a sort of Internet wall of shame. It currently lists over 50 drugs that generic firms say were kept from them at least temporarily.
“Such practices upset the careful balance that Congress sought between product innovation and access,” Food and Drug Administration commissioner Scott Gottlieb said in a statement earlier this month.
In Canada, the generic industry has pressed Health Canada to bring in regulations that would oblige companies to supply the drugs.
The department is aware of the generics’ “ongoing challenges,” is actively investigating the situation and will take whatever followup measures may be necessary, said Geoffroy Legault-Thivierge, a Health Canada spokesman.
News of the investigations is coming to light after the branded industry scored a win on a different front recently, with Canada agreeing in the new USMCA trade deal to extend the patent protection for a leading class of medicines by two years. The generic sector, whose copies of those “biologic” drugs would be kept off the market longer by the measure, had lobbied against it.
At the Competition Bureau’s request last year, the Federal Court ordered three companies — Pfizer, Sanofi Aventis and Celgene — to turn over certain documents and make employees available for questioning for the investigation.
Pfizer and Sanofi said this week that the bureau later told them they were no longer subject to investigation. Celgene officials could not be reached for comment.
“Pfizer Canada has never engaged in any of the alleged conduct that the Competition Bureau was inquiring into,” said company spokeswoman Christina Antoniou.
Sanofi spokeswoman Catherine Rose Cunningham said her corporation “has a strong culture of compliance and employees are trained on the content and importance of adhering to our code of ethics.”
Asked to confirm if action
I DON’T THINK THERE’S ANY DOUBT THIS IS AN ATTEMPT TO BLOCK COMPETITION.
had been dropped against those two companies, Albert said the agency cannot comment on an ongoing investigation.
The “bioequivalency” tests required by federal regulators essentially compare two groups of patients — one taking the original medicine, one the generic — to ensure the drugs act similarly in their bodies.
Branded pharmaceutical corporations have “for decades” handed over what are known as reference products to generics for use in the tests, said Jim Keon, president of the Canadian Generic Pharmaceutical Association.
That began to change in the last few years, he said, a time when the so-called “patent cliff” had already ushered in generic competition for numerous blockbuster drugs.
“All of a sudden, these products are being much more tightly controlled,” said Keon. “I don’t think there’s any doubt this is an attempt to block competition, delay competition.”
In some cases, every day of holdup in approving a generic version of a medicine can cost the health-care system hundreds of thousands of dollars, he said.
The practice began with new, specialty drugs that often require patients to be helped or monitored by health professionals and are dispensed only at pharmacies the manufacturer authorizes. But Keon said the refusal to sell to generic companies appears unrelated to the health rationale for that system.
The Competition Bureau seems to agree.
Wholesalers acting on the instructions of manufacturers have restricted generic access to at least 20 drugs, say affidavits filed in court by bureau investigators.
For several years, one wholesaler “refused all requests from generic manufacturers” to buy drugs made by two of the companies subject to court action, they said.
Generic manufacturers were sometimes able to obtain the needed samples by other means, the bureau says in the court filings, but only after an unnecessary delay.